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[14:30:00] DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: And not going far enough to ease up on what they call egregious regulations from Obamacare. Things like that. Ted Cruz, for example, he's one of the four that we're talking about that released the statement together. He just released his own statement, because he was actually one of the men in the room. He was one of the 13 Senators were -- was part of the negotiations. He insisted that he does want to get to yes, but he has a lot of things that he needs to work on. Again, whether or not he can get there or whether or not this is as good as it gets from the leadership point of view, to try to appease the conservatives and to try to appease the moderates, we don't know. But at the end of the day, you know, it is right now about leverage.

And I see Dave there on the screen. He knows a whole lot more about this than I do because I used to be banging his door down in the hallways asking what was happening in these talks.

BROOKE BALDWIN, CNN ANCHOR: We'll ask him.

Let me introduce these two to everyone else. David Hoppe used to serve as chief of staff to House Speaker Paul Ryan. He is currently senior consultant for the One Nation Health Coalition. Also with us, we have business analyst, Dylan Ratigan.

So, David to you on Dana's point on leverage and all the knocks that will be on, presumably, Mitch McConnell's door, how will this work so far with these four "nos" for now?

DAVID HOPPE, SENIOR CONSULTANT, ONE NATION HEALTH COALITION & FORMER CHIEF OF STAFF TO SPEAKER PAUL RYAN: Well, I think it's helpful to understand it's not just these four. There's another group of members, probably as many as 10 to 12 who have concerns, want some changes and there's others who may quibble with certain things but aren't going to look for changes. You've got a group of members on the Republican side, all who have little differences they'd like, some who have bigger differences and it is the process that I'm sure Senator McConnell expected to have going on right now after the introduction of this bill or the -- making this bill draft public this morning, that he would be talking to a number of his members and arrange some of whom will say, gee, guess I can't vote for it now as Dana says, that's leverage. But also, there's other members. And he wants to make sure he can get to 50. He hopes to get to 52, frankly, but he wants to get his members set so they can move forward and start the changeover from the ACA to a system where there will be more choices for families, for patients, and for individuals. That's the crux here, the big crux of the matter. And he's trying to find a starting point in that by moving this bill forward next week.

BALDWIN: We sort of dove into this conversation without really getting into the meat and potatoes, what's in this Senate bill, and we have some of the bullets on the screen.

But Dylan, my question to you is, if you're thinking from a liberal point of view, is it a good day for Democrats to see someone like Rand Paul irked? Because that means, you know, that this really is maybe a little bit closer to Obamacare than maybe what the Rand Paul's and the Ted Cruzs wanted. I mean, is there any consolation there?

DYLAN RATIGAN, BUSINESS ANALYSTI don't really think so. I would defer to the other two on that. I think really what you're getting here is political theater and leverage. It's a way to generate money and favors in the future. The value of these votes just went up substantially. This has nothing to do with policy or health care. I mean, the thing that's truly the most, both saddening and amusing about the entire process, as you know, is America had a beautiful health care system installed by Dwight Eisenhower after World War II where if you had a job, you got health care from private health insurance. It was a good idea from a good president. We had a president recently who had a good idea who put in a terrible policy, which was the American Health Care Act, where basically he perpetuated the employer-based system and the private health insurance monopoly but mandated everybody buy into a monopoly, which is totally insane. So you're trying to unwind a pretzel that was built in the 1950s. And the Republicans instead of actually unwinding the pretzel are really just trying to peel back Obama's bad bill. But nobody on either side of the ledger at this point is actually trying to update the American health care system in a way that reduce costs, adds efficiency, and creates more coverage. And that really is the most frustrating thing.

HOPPE: I would differ just a little bit on a point on this. Part of the reason they aren't going further to make real changes to try and create a very new system is because the reconciliation process doesn't allow that. The things you're talking about, and they are good things, they're things I frankly support, are things that have to be done under regular order because they are authorization. They have only incidental budget impact. So, this is part of the one, two, three steps we've heard about before but if it's right, this reconciliation bill cannot do many of the things that need to be done to create a new system of health care because the old one is not going to work going forward and the ACA made problems worse.

BALDWIN: Go ahead, Dylan.

RATIGAN: Real quick, Brooke. The thing is, ACA was a well -- good- intentioned people with a very bad policy. This may very well be another group of well-intentioned people with a very body policy. The absurdity of this is, I guarantee you, if this bill passes or not, we will be having another health care debate on another set of health care legislation in a matter of years.

[14:35:04] BALDWIN: Gentlemen, let me ask both of you to stand by. Dana Bash, I hear you have some news on some sort of presidential

phone call.

BASH: Well, this comes from our colleague, Lauren Fox, who heard that the president called Senator Rand Paul a couple of days ago, asking him to support this health care bill, and Lauren is told that Paul actually told the president, here are the problems with it and explained the problems and told the president that he would not support the bill as is. Which, again, in sort of in general, is not surprising, given that Rand Paul has been very vocal about that in public.

One of the things that I take away from that reporting that Lauren just gave us is that the White House and the president himself, we were told, has -- they've been sort of told to back off and that the Senate majority leader kind of wanted to handle it himself this time, got a little bit messed up for lots of reasons. But the House was a little bit messy when the process went through the House.

And the fact that the president is reaching out to people like Rand Paul, you know, maybe it's because, you know, they know each other, they've known each other since the campaign and they have that kind of relationship, or maybe he's, you know, inserting himself in another way. Who can blame him. He's the president. He made this political promise just like everybody else. But it kind of gives a window into some of the behind the scenes operating that's going on.

BALDWIN: Sure, and also from Sarah Huckabee Sanders just in that off- camera briefing, she had said the White House will play a role in these negotiations moving forward.

We're going to say thank you for now. Dana and David and Dylan, thank you all so much.

We're going to take a quick break. When we come back, much more on our breaking news, the big news from the president, via Twitter, the fact that there are no tapes. There are no recorded conversations that he would have had with James Comey. So where does the -- where do we stand? How does this affect any sort of investigation? What about the presidential credibility? Lots and lots of questions today. We'll be right back.

(COMMERCIAL BREAK)

[14:41:27] ANNOUNCER: This is CNN breaking news.

BALDWIN: Back to our breaking news, if you're just tuning in here, the president of the United States now admitting, via Twitter, that he has no recordings of his conversations with the fired FBI Director James Comey after insinuating the possibility they existed when the scandal first broke in May.

With me now, David Catanese, the senior politics writer for "U.S. News & World Report."

So, David Catanese, we were planning on talking about something entirely different, but let's go with tapes, shall we?

Let's throw the tweets up on the screen so everyone can see and we're all on the same page. This is the news that dropped from the president today. "With all the recently reported electronic surveillance, intercepts, unmasking and illegal leaking of information, I have no idea whether there are 'tapes or recordings' of my conversations with James Comey, but I did not make and do not have any such recordings."

Apparently, he doesn't regret that original tweet. The tweet today was very clear in that, you know, he waited 41 days, but this wasn't a game. That's all according to Sarah Huckabee Sanders. Your read?

DAVID CATANESE, SENIOR POLITICS WRITER, U.S. NEWS & WORLD REPORT: And right in the middle of the dropping of the Senate health care bill.

BALDWIN: Yes.

CATANESE: Which, you know, could potentially be a --

(CROSSTALK)

BALDWIN: May or may not.

CATANESE: May or may not be a distraction. We can't get inside President Trump's head, but I think it's coincidental that you're getting all these bad headlines out of health care, and he decides to divert and here we are.

I don't think we ever thought or I never thought that there were tapes. It didn't seem like a serious allegation. What I do think the potential consequences could be is potential intimidation, potential witness tampering, which is a federal crime, saying to the FBI director, hey, you may not want to go here because I've got you recorded. I may have you word for word, so you better get your story straight when you're explaining it. This could -- I mean, I'm not a lawyer, but I think you might see some speculation on that front, whether it builds --

(CROSSTALK)

BALDWIN: Well, we had a lawyer on. Let me get right to it, and he said you're absolutely right. This would fall in that purview as potential for that.

But let's think about when we saw the president last night in that sort of campaign-style rally in Iowa, and what he was talking about, this is -- I have a broader point, you know, he brought up this, you know, immigration, which has been on the books since, like, 1996, it's not new. He was talking about, you know, the Paris Accord and to heck with it being nonbinding. We saw him in the Rose Garden saying it is indeed nonbinding. We talked about solar panels on the wall. When you have a president putting all of this out there and then tweeting this bomb but not doing interviews and not, you know, doing briefings on camera, we can't push him. Where's the accountability? CATANESE: Well, he's throwing everything at the wall, really. You

just mentioned three or four different items. Now you've got a health care bill that is sitting in the Senate and now we're back to tapes and James Comey and Russia. It doesn't seem like there's a concerted communications strategy. And frankly, that's a whole completely other story about who's really running the communications department and who is going to run the communications document. I think this shows a complete flaw, a direct flaw of a communications strategy, what message you want to drive on any single day. I think the Iowa rally, you know, it did -- I think that does help the president to put him out in the crowds that he loves to feed off of.

BALDWIN: He's great doing those things, sure.

CATANESE: He's comfortable at it. That's where he's at his best. That's peak Donald Trump. But here we are, we're barely talking about that rally anymore because there's no cohesive strategy to follow it up. It seems like a lot of his proposals are riffs without follow- ups. And the big-ticket items, tax reform, health care reform, are imperiled because there isn't a driving strategy from the White House either. So there are multiple problems, communication and substantive and, obviously, an investigation that is going to loom over him for months.

[14:45:16] BALDWIN: I should also mention, and you know, the president had said by the end of this week, and part of the reason -- this is according to someone close to him -- that the deadline for him to release, if there are tapes, release any of the tapes to Congress is tomorrow and so this source said the president knew he needed to come clean. So that's that.

What about you have Adam Schiff, you know, ranking Democrat on that committee, saying, quote, "I don't intend to take this" -- this being the no tapes bit -- "as the last word."

So for Democrats, David Catanese, it sounds like this is not case closed.

CATANESE: Well, I don't think so. Because the president, you know, it's all about trying to parse his words, what did he really mean when he said, you know, drop the case on Michael Flynn. Was that a threat? I mean, frankly, this could be up to a grand jury panel to decide what the president was meaning of these tweets. And I think, you know, if you're Adam Schiff, you want to get exactly to the bottom on what was his intent to suggest there could be tapes out there. Did that mean that someone else in the administration suggested to him that they were taping conversations and he didn't know about it? Did that mean that he was interested in taping conversations? Or was it simply a threat to the FBI director to say, what I mentioned before, watch what you say because I may have you recorded and I may be able to counter what you say in public. And I think that may be the most reasonable explanation for why he came out and suggested tapes, to attempt to intimidate James Comey, which obviously didn't work, because he's got the real tapes. He's got -- well, he's got notes of everything. He seemed to be very meticulous in every meeting he ever had.

BALDWIN: Sure. But it also led to the hiring of the special counsel which is essentially what the now fired FBI director wanted.

David Catanese, thank you very much.

CATANESE: Thanks, Brooke.

BALDWIN: Got Democratic Senator Bob Casey waiting in the wings for us, joining us live from Capitol Hill.

Senator Casey, a pleasure. Thanks so much for coming on.

SEN. BOB CASEY, (D), PENNSYLVANIA: Brooke, thank you.

BALDWIN: I promise you we'll get to health care, but we have to talk about this tape news from the White House. This according to CNN reporting, there's this Trump associate who says that the president has been amused by all of this for weeks and weeks, people obsessing over this, their word, obsessing. Would you like to respond to that, Senator?

CASEY: Well, I don't think it's anything to be amused about. When you or anyone in your administration or your activities are under investigation, and you fire the investigator, and you create all kinds of controversy with regard to that investigation and any aspect of it, that's a very serious matter. And we'll see what Mr. Mueller, what he determines at the end of his review.

But this is -- this is serious business. We know two things. Right? We know that the Russians interfered with our election. That alone is objectionable, in and of itself. And secondly, we know that it was done to benefit one campaign over the other. That alone should give the president all the information he needs to say to Vladimir Putin, you will never do this again. If you try it again, we will stop you. And we will sanction you if you do it. I'd like to hear that from the president instead of all the other things that he obsessed about. He should challenge Vladimir Putin to never allow this to happen again and tell him directly what will happen by way of sanctions or otherwise if he does this again to one of our elections.

And by the way, they're actively doing it right now, preparing for the 2018 election unless we stop them.

BALDWIN: Yeah, well, we'll wait for that conversation between the president and Vladimir Putin.

But in the meantime, on the tapes, Senator, you know, the fact that the president sort of floated this out right after he had fired James Comey, you know, and it's not true, that there are no tapes, do you think the president should apologize?

CASEY: I don't know where to begin with the apologies he should -- he should provide. At a minimum, we should make it very clear, especially to young people thinking about entering public service, you don't act this way as a public official. This is irresponsible. You don't act the way the president's acting. So, at a minimum, we should use it as an example of what not to do when you're a public official, especially the most powerful public official in the country. BALDWIN: All right. Senator Casey, on to health care. 147 pages,

this bill. Have you read it? And what do you think?

CASEY: I've just started going through it, but we knew a lot about what was in here from the beginning. This political party, this group of Republicans, I should say, in the Senate, have been determined not just for weeks and months, but for decades to have this moment where they're going to decimate Medicaid and at the same time give tax giveaways to the super rich. That is obscene and that alone is the basis upon which anyone could oppose this bill. There's a lot of other bad things that will affect virtually every American, but that alone is obscene, it's obnoxious, and I think it's contrary to our values. And I'm going to do everything I can to stop them from doing that to those families. People with disabilities, kids with disabilities --

[14:50:20] BALDWIN: You mentioned Medicaid.

CASEY: -- poor children in rural areas and small towns.

BALDWIN: Sure. But you mentioned -- Senator, you mentioned Medicaid and let me follow up on that. When you read this bill, it talks about the expansion will be kept in place until 2021, and then it's phased out over a three-year period. So it doesn't change until five years, Senator, which includes a presidential election.

CASEY: Look, the bottom line is, they're doing two things to Medicaid that have never been done before. Starting on page 53 and page 86. They're block granting, that's on page 86. Page 53 is the per capita cap. This has never happened before. They're taking away the guarantee of Medicaid that we've had for 50 years. And by the way, in those 50 years, we still have the strongest economy, and we still have the strongest military. There is no rationale for devastating -- decimating Medicaid like they're doing and we're going to oppose them to the end of the earth to stop them from doing that to people.

BALDWIN: Well, so far, when you're doing the math, and you well know how this goes, they can only afford -- Senator McConnell, the majority leader, can afford to lose two to make the vice president be the tie breaking vote. So far, there are four Republican Senators who are sort of "no" for now, that's their stance. Have you talked to any Republican Senators, any of your colleagues on the other side of the aisle who says that they will vote against this?

CASEY: Have not talked to anyone who said they'll vote against it, but I would hope, now that we actually know the actual text of the bill, and know exactly what they would do to Medicaid, I would hope that some group of Republicans would stand up and say, no, we're not going to allow anyone with a disability to lose their Medicaid. Not a single person should lose it. And if they're not willing to do that, then I think they're a different kind of political party than I used to think they were.

BALDWIN: Senator Casey, thank you so much for your time.

CASEY: Thank you, Brooke. BALDWIN: Coming up next, Michael Smerconish will join me live on the

president admitting there are no tapes of his conversations with James Comey, the fallout from this today, and why one White House source tells us this is the worst thing he has done during his presidency.

(COMMERCIAL BREAK)

[14:55:44] SEN. TED CRUZ, (R), TEXAS: -- part of the working group. Indeed, starting four months ago, Lamar Alexander and I worked to bring together a working group, initially of six Senators, that ran the full spectrum of the ideological differences among the conference, and we've been working collaboratively, that entire time, trying to solve the problems, the underlying problems in health care. This current draft doesn't get the job done. But I believe we can get to yes. I believe we can get this done. There is an agreement to be reached. And I have been, for the last five months, working around the clock to get to that agreement, and I still believe we can get there.

The key to getting an agreement, to getting a bill that can pass, is we need common sense reforms in the bill that lower the cost of premiums. The single biggest reason that so many people are unhappy with Obamacare, that are hurting under Obamacare, is because it's caused premiums to skyrocket. When I'm home in Texas, I hear over and over again from Texans who say, I can't afford health insurance because of Obamacare. We've got to fix that. The current draft circulated this morning doesn't do nearly enough to lower the cost of premiums but there are a number of common-sense reforms that have wide agreement within the Republican conference that we can include and I think we should include.

UNIDENTIFEID REPORTER: Can you talk about the amendments?

CRUZ: Well, one of the suggestions that I put forth is what I call the Consumer Freedom Amendment that says that if an insurance company is offering a health insurance plan in a state that is consistent with the Title I mandates, that insurance company can also sell, in that state, any other plan that consumers desire. What that would have the effect of doing is immediately dropping the cost of premiums. You know, when we met with leaders of insurance companies, and we asked, as I've asked them repeatedly, what is the most important piece for lowering premiums, the answer that we consistently hear is, let us sell the policies consumers want to buy. What that would enable people to do is buy low-cost catastrophic policies and enable people who don't have insurance right now because they can't afford it to be able to afford insurance. And it doesn't take anything away from anyone. Instead, it adds additional choices, more choices, more competition, more options, lower prices. That's what consumers want. And it's what the Republican majority should give to them.

UNIDENTIFIED REPORTER: Senator, early on you said it was important that these things not be negotiated in the media. Why are you coming forward publicly with your complaints about the bill now?

CRUZ: Well, look, this has been an ongoing process. We have had a long deliberative process early on. The working group met for over a month with no leaks to the media. We met right next door, right in that conference room in my office, working to come together. We made a lot of progress. There's a lot of agreement. Not all of that agreement is reflected in the current draft. We're at a different stage. There's now a bill draft that is public, and so there has been a lot of public debate on Obamacare for the last seven years and there will continue to be debate.

We can get this done. We can get to yes, but the key to getting it done, to getting to yes, is we need common sense reforms that lower the cost of premiums so that health insurance is more affordable for families who are struggling.

(CROSSTALK)

UNIDENTIFIED REPORTER: Senator Cruz, are you making yourself -- people, sometimes, when we get to these big bills, they put themselves in play, and you can trade horses and get those things. It's good optic, I fought for this. Is none of that going on here? These are just things that you oppose or do you think that by saying no that they will come to you and say, maybe we can help you on this issue and maybe get you to yes.

CRUZ: I had been clear from day one that I want to get to yes. When I campaigned, I ran on repealing Obamacare. It was central promise of the campaign. IN my time in the Senate, nobody has fought hard against Obamacare than I have. This matters. We've got to do it. And we've also got to get it right. It's not enough just to pass a big that has Obamacare repeal in the title. We've got to have legislation that fixes the underlying problem. The average family's premiums have risen over $5,000 a year. That is the fault of the federal government. It's the fault of the failed federal policy that is Obamacare. We need to fix that.

And so throughout the conversations with the working group, with the majority leader, with the president, with the vice president, I've made very clear, I want to get to yes, and the way to get --